On Thursday, Obama Administration disclose a detail plan to have further control over the financial system and to impose some more regulation on major players of financial systems to prevent the system from any further instability.
Treasury Secretary Timothy Geithner present the plan. He mentioned that the changes are required to fix the loop holes of the financial system that are being exposed in the current financial crisis. The main purpose of the plan is to repair the system that becomes proved as unstable and fragile.
The proposal need the approval from congressional authority. Some highlights of the plan are:
- Impose tough standards on financial institutions.
- Extending Federal Regulations for the first time to all trading in financial derivatives, exotic financial instruments.
- Companies need to have a hedge funds and other private pools of capital to registered with SEC. The minimum threshold is yet to determined.
- Creating a systemic risk regulator to monitor the bigger institutions.
- Extending more authority to take over major non-banking financial institutions in case of any requirement.
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